An agreement, on the part of A to acquire title in his own name
to a tract of land upon the best terms possible, and when acquired
to convey to B an undivided part thereof, and on the part of B to
pay to A his proportionate part of the purchase money and expenses
incurred in obtaining title, is a contract for the sale of lands
within the Statute of Frauds, and the contract being verbal and not
in writing as required by the Statute, A, after performing his part
of the agreement, cannot recover from B his share of the price and
expenses in an action at law founded upon and seeking to enforce
the contract; nor in equity, under a statute which prescribes the
same forms at law and in equity, when the pleadings show no
allegation to lay a foundation for equitable relief.
Under the statute law of the Territory of Montana there is no
distinction between legal and equitable remedies, and there is "but
one form of action for the enforcement or protection of private
rights and the redress or prevention of private
Page 116 U. S. 492
wrongs," which is "the same at law and in equity." Revised
Statutes of Montana of 1879, p. 41. This law being in force, James
M. Ryan, the defendant in error, brought this suit in the District
Court for the Third Judicial District, in the County of Lewis and
Clarke, Montana Territory, against Elijah M. Dunphy, the plaintiff
in error, to recover judgment against the latter on his promissory
note for $1,511.50, dated June 1, 1879, and payable to the
plaintiff in error on December 1st following.
The defendant admitted in his answer the execution and delivery
of the note, and that it had not been paid, and, by way of
cross-action and counterclaim, alleged that in February, 1879, one
Rumsey and one Embrey were the owners of certain placer mining
ground, with the appurtenances particularly described, situate in
Grizzly Gulch, Minnesota mining district, in Lewis Gulach,
Minnesota mining district, in Lewis and Clarke County, Montana, and
that at the time mentioned, the defendant being in negotiation for
the purchase thereof, entered into a contract with the plaintiff,
which is thus stated in the defendant's answer:
"The said defendant was to effect the purchase of the two-thirds
of the above-described property upon the best terms possible,
exercising and using his best judgment for the joint use and
benefit of said plaintiff and defendant; that the title thereto,
and all deeds of conveyances for the said interest in and to said
premises and property, were to be taken in the name of the
defendant herein, and that the plaintiff herein was not to be known
in the transfers and purchase until such time as the purchase was
completed and all of the conveyances executed, and, when so
completed, and a good and sufficient title acquired to said
property by defendant, the defendant was to make and deliver to the
said plaintiff a good and sufficient deed of conveyance for the
undivided one-third thereof, and that, upon the execution and
delivery of such deed, the said plaintiff promised and agreed to
pay to this defendant the one-third of all moneys paid by him as
the consideration for such conveyance and transfer, and the
one-half of all expenses incurred and paid in and about obtaining
the title to the said property as aforesaid. "
Page 116 U. S. 493
The answer further averred, in substance, that on July 26, 1879,
the defendant had acquired a complete and perfect title to the
entire interest and estate in said property by conveyances from
Rumsey and Embrey; that the consideration for said conveyances was
$5,200, and the expenses incident to acquiring the title were
$2,200, and that on the day last mentioned, the plaintiff was
indebted to the defendant, under said contract, on account of the
said purchase and expenses, in the sum of $1,935.51, and that on
that day, he tendered to the plaintiff a good and sufficient deed
for the one undivided third of said property, and demanded of him
the payment of the last-mentioned sum of money, and the plaintiff
refused to receive the deed, or pay the money demanded of him, and
denied the existence of the agreement above set forth. The
defendant therefore prayed judgment against the plaintiff for the
sum of money so demanded, with interest from July 26, 1879.
The plaintiff filed a replication, in which he denied that he
ever made the contract set out in the answer.
Upon the trial of the cause, as appeared by the bill of
exceptions, the defendant being upon the stand as a witness in his
own behalf, and having stated that he did, in February, 1879, enter
into a verbal contract with the plaintiff for the purchase of the
mining ground described in the answer, and that there was no
written agreement, was asked to state what the agreement was. "The
plaintiff objected to the witness answering said question, for the
reason that the agreement, not being in writing," was
"void by the statute of frauds. The court sustained the
objection, and refused to permit the said witness to answer the
question. . . . The defendant then proposed to prove by said
witness the truth of the matters alleged and set up in his answer,
and read the same to the court. The court refused to permit the
defendant to prove said matters, on the ground that the said
matters rested in parol and were not in writing."
The defendant excepted to these rulings. There being no further
evidence, the jury returned a verdict for the plaintiff for $1,733,
the amount due on the note sued on, for which sum the court
rendered judgment against the defendant.
Upon appeal by the defendant to the Supreme Court of the
Page 116 U. S. 494
territory this judgment was affirmed. By the present writ of
error, the defendant seeks a reversal of the judgment of
affirmance.
Page 116 U. S. 495
MR. JUSTICE WOODS delivered the opinion of the Court. After
stating the facts in the language reported above, he continued:
The defendant insists that the court erred in refusing to allow
him to prove the contract set up in his answer. The statute law of
Montana applicable to the question in hand is as follows: Chapter
XIII, ART. I, of the Revised Statutes of Montana of 1879 provides
as follows:
"Section 160. No estate or interest in land, other than for
leases for a term not exceeding one year, or any trust or power
over or concerning lands, or in any manner relating thereto, shall
hereafter be created, granted, assigned, surrendered, or declared,
unless by act or operation of law, or by deed or conveyance in
writing, subscribed by the party creating, granting, assigning,
surrendering, or declaring the same, or by his lawful agent
thereunto authorized by writing."
"Section 162. Every contract for the leasing for a longer time
than one year, or for the sale of any lands or interest in lands,
shall be void, unless the contract, or some note or memorandum
thereof expressing the consideration be in writing, and be
subscribed by the party by whom the lease or sale is to be
made."
The denial in the replication of the plaintiff of the making of
the contract on which the defendant based his cross action is as
effective for letting in the defense of the statute of frauds
Page 116 U. S. 496
as if the statute had been specifically pleaded.
May v.
Sloan, 101 U. S. 231;
Buttimere v. Hayes, 5 M. & W. 456;
Kay v.
Curd, 6 B.Mon. 100. The question is therefore fairly
presented, whether the contract alleged in the answer of the
defendant, not being in writing, is valid and binding under the
statutes of Montana.
We cannot doubt that the contract which the defendant seeks to
enforce is a contract for the sale of lands. According to the
averments of the answer, it was this: the plaintiff, being in
treaty for the purchase of the lands, agreed with the defendant to
acquire title to the undivided two-thirds thereof in his own name,
upon the best terms possible, and, when he had acquired the title,
to convey to the plaintiff, by a good and sufficient deed, an
undivided third of the premises, for which the plaintiff promised
to pay the defendant one-third of the purchase money, and one-half
the expenses incurred in obtaining the title. This is simply an
agreement of the defendant to convey to the plaintiff a tract of
land for a certain consideration. It therefore falls precisely
within the terms of ยง 162, above quoted. It is a contract for the
sale of lands, and, not being in writing, signed by the vendor, is
void. The circumstance that the defendant, not owning the land
which he agreed to convey, undertook to acquire the title, instead
of taking the case out of the statute, brings it more clearly and
unequivocally within its terms. A contract void by the statute
cannot be enforced directly or collaterally. It confers no right
and creates no obligation as between the parties to it.
Carrington v. Roots, 2 M. & W. 248;
Dung v.
Parker, 52 N.Y. 494. The defendant must therefore fail in his
cross-action unless he can take his case out of the operation of
the statute of frauds.
The defendant seeks to evade the effect of the statute by the
argument that in the transaction set out in his answer he was
acting as the agent of the plaintiff as well as for himself, and
that, having as such agent paid for the share of the land which he
had agreed to convey to the plaintiff, he is entitled to recover
back the price as for money paid out and expended for the plaintiff
at his request.
Page 116 U. S. 497
It is well settled that when one person pays money or performs
services for another upon a contract void under the statute of
frauds, he may recover the money upon a count for money paid to the
use of defendant at his request, or recover for the services upon
the
quantum meruit count.
Wetherbee v. Potter, 99
Mass. 354;
Gray v. Hill, Ryan & Moody 420;
Shute
v. Dorr, 5 Wend. 204;
Ray v. Young, 13 Tex. 550. But
in such cases, the suit should be brought upon the implied promise.
Buttemere v. Hayes, 5 M. & W. 456;
Griffith v.
Young, 12 East 513;
Kidder v. Hunt, 1 Pick. 328.
Clearly the present case does not belong to that class. Here, the
suit is based upon, and its purpose is to enforce, the void
contract.
The cause of action set up in the defendant's answer is that the
plaintiff, having contracted to purchase the land, and receive a
conveyance therefor, became liable, upon a tender to and refusal by
him of the deed, to pay the agreed price. This is a suit upon the
express contract. There is no implied contract on which the cross
action can rest, for the law implies a contract only to do that
which the party is legally bound to perform. As the express
contract set up by the defendant was void under the statute, the
plaintiff was not bound in law to accept the deed tendered him by
the defendant or pay the purchase money. The defendant paid no
money to or for the plaintiff. The money paid out by him was to
enable him to perform his contract with the plaintiff. He paid it
out for himself and for his own advantage. The plaintiff has
received neither the money nor the land from the defendant. Neither
reason nor justice dictates that he should pay the defendant the
price of the land, and therefore the law implies no provision to do
so. 2 Bl.Com. 443;
Ogden v.
Saunders, 12 Wheat. 341. The cross-action cannot
therefore be sustained on any supposed implied promise of the
plaintiff.
But the defendant's counsel further insist that there has been
such a part performance of the contract as entitles the defendant
to equitable relief, on the ground that it would be a fraud on him
not to enforce the contract.
The case, as stated in the defendant's answer, is not,
either
Page 116 U. S. 498
in the averments or prayer, one for equitable relief. There is
no averment, and no proof was offered, that the refusal of the
plaintiff to accept the deed and pay the purchase price of the land
has subjected the defendant to any loss. His answer avers that
before he made his contract with the plaintiff he was negotiating
with the owner for the purchase of the land. It is not alleged that
he would not have purchased the land if he had not made his
contract with the plaintiff. There is no averment that the land is
not worth, or that it cannot be sold for, all it cost him. As
between these parties, there has been no payment, no possession,
and no improvements. The only complaint of misconduct on the part
of the plaintiff which can be inferred from the pleadings is his
refusal to perform a verbal contract for the purchase of lands. But
the mere breach of a verbal promise for the purchase of lands will
not justify the interference of a court of equity.
Purcell v.
Miner, 4 Wall. 513. There is no fraud in such a
refusal. The party who so refuses, stands upon the law, and has a
right to refuse. Under the circumstances of this case, the statute
is as binding on a court of equity as on a court of law. If the
mere refusal of a party to perform a parol contract for the sale of
lands could be construed to be such a fraud as would give a court
of equity jurisdiction to enforce it, the statute of frauds would
be rendered vain and nugatory. The defendant knew, or ought to have
known, that the statute requires such a contract as the one he
seeks to enforce to be evidenced by writing. That he did not exact
a contract in writing is his own fault. Courts of equity are not
established to relieve parties from the consequences of their own
negligence or folly.
The statute of frauds is founded in wisdom, and has been
justified by long experience. As was said by Mr. Justice Grier in
Purcell v. Miner, ubi supra, the statute "is absolutely
necessary to preserve the title to real property from the chances,
the uncertainty, and the fraud attending the admission of parol
testimony." It should be enforced. Courts of equity, to prevent the
statute from becoming an instrument of fraud, have in many
instances relaxed its provisions. But this case is barren of any
averment or proof, or offer of proof, which ought to
Page 116 U. S. 499
induce a court of equity to afford relief. It follows that
neither in a court of law nor a court of equity can the defendant
maintain his suit on the cause of action set up in his answer by
way of counterclaim or cross action.
Judgment affirmed.
